Important Terms for this Lesson:
• contractual capacity - the ability to understand that a contract is being made and its general meaning
• age of majority - the age at which a person can be legally bound to contracts
• minor - a person who has not reached the age of majority, which is usually 18
• disaffirmance - ending a contract when both parties give back the consideration
• necessaries - things needed to maintain life and lifestyle
• ratification - acting toward a contract as though one intends to be bound by it
• emancipation - the severing of the child-parent relationship
• mental incapacity - not having the ability to understand the consequences of contractual acts
• intoxication - mental impairment caused by voluntary use of alcohol, drugs, or inhalants
• scope of authority - within the range of acts an organization has authorized a party to do
Summary of Concepts
Q: What three classifications of individuals lack contractual capacity? A: The three classifications are minors, the mentally incapacitated, and the intoxicated. Q: What are two ways that capacity to contract on behalf of an organization can be created? A: Capacity to contract on behalf of the organization can come from a delegation of authority or from apparent authority created or allowed by the business. Q: Give two examples of informal emancipation of a minor. A: Two examples: (1) The parent and minor agree that the parent will cease support. (2) The minor marries. (3) The minor moves out of the family home. (4) The minor becomes a member of the armed forces. (5) The minor gives birth. (6) The minor undertakes full-time employment.
Q: What is intoxication? A:Intoxication can arise from using alcohol in forms such as beer or vodka, from using drugs such as marijuana or crack cocaine, or inhaling products such as glue or aerosols.
• contractual capacity - the ability to understand that a contract is being made and its general meaning
• age of majority - the age at which a person can be legally bound to contracts
• minor - a person who has not reached the age of majority, which is usually 18
• disaffirmance - ending a contract when both parties give back the consideration
• necessaries - things needed to maintain life and lifestyle
• ratification - acting toward a contract as though one intends to be bound by it
• emancipation - the severing of the child-parent relationship
• mental incapacity - not having the ability to understand the consequences of contractual acts
• intoxication - mental impairment caused by voluntary use of alcohol, drugs, or inhalants
• scope of authority - within the range of acts an organization has authorized a party to do
Summary of Concepts
What three classifications of individuals lack contractual capacity? A:
The three classifications are minors, the mentally incapacitated, and the intoxicated. Q:
What are two ways that capacity to contract on behalf of an organization can be created? A:
Capacity to contract on behalf of the organization can come from a delegation of authority or from apparent authority created or allowed by the business. Q:
Give two examples of informal emancipation of a minor. A:
Two examples: (1) The parent and minor agree that the parent will cease support. (2) The minor marries. (3) The minor moves out of the family home. (4) The minor becomes a member of the armed forces. (5) The minor gives birth. (6) The minor undertakes full-time employment.
What is intoxication? A: Intoxication can arise from using alcohol in forms such as beer or vodka, from using drugs such as marijuana or crack cocaine, or inhaling products such as glue or aerosols.